8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest reported) October 26, 2004

AMERICAN SHARED HOSPITAL SERVICES

(Exact name of registrant as specified in its chapter)

California	0-8789	94-2918118
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Four Embarcadero Center, Suite 3700, San Francisco, CA	94111
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 415-788-5300

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
	ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURE
EXHIBIT 99.1

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS

On October 26, 2004, the Company issued a press release announcing its financial results for the three and nine months ended September 30, 2004. The full text of the press release is attached hereto as Exhibit 99.1. The Company does not intend for this exhibit to be incorporated by reference into future filings under the Securities Exchange Act of 1934. The foregoing information is provided pursuant to Item 12 (Results of Operations and Financial Condition) of Form 8-K.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)      Not applicable.

(b)      Not applicable.

(c)      Exhibits

The following exhibit is filed as part of this report:

99.1      Earnings Press Release, dated 10/26/04

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 26, 2004	American Shared Hospital Services
	By:	/s/ Ernest A. Bates, M.D.
		Ernest A. Bates, M.D.
		Chairman and CEO

EX-99.1

Exhibit 99.1

AMERICAN SHARED HOSPITAL SERVICES
REPORTS 2004 THIRD QUARTER AND NINE MONTH RESULTS

Operating Income Sets New Records on Higher Revenue

San Francisco, CA, October 26, 2004 — AMERICAN SHARED HOSPITAL SERVICES (AMEX,PCX:AMS), the leading provider of Gamma Knife® radiosurgery services, today announced record operating income and higher revenue for the third quarter and first nine months of 2004.

For the three months ended September 30, 2004, revenue increased 3% to $4,136,000 from $4,011,000 for the third quarter of 2003. Operating income rose 13% to a record $860,000 from $758,000 a year earlier. Net income increased to $840,000, or $0.16 per diluted share, which included an income tax benefit of $472,000 related to the exercise of previously expensed stock options. For last year’s third quarter, net income was $369,000, or $0.07 per diluted share.

For the nine months ended September 30, 2004, the Company reported revenue of $12,479,000, a gain of 6% compared to revenue of $11,785,000 for the same period a year ago. Operating income grew 12% to a record $2,471,000 from $2,197,000 last year. Net income increased to $1,599,000 or $0.31 per diluted share. This compares to net income for the first nine months of 2003 of $1,039,000, or $0.20 per diluted share.

Ernest A. Bates, M.D., Chairman and Chief Executive Officer, said, “Based on contracts in hand, over the next nine months we expect to increase the number of Gamma Knife centers by 17%. We see many opportunities to continue to build our Gamma Knife platform and to expand our business into the market for radiosurgery of the body, a new and exciting growth opportunity for AMS.” Bates noted that the Company’s strong operating results have allowed it to increase the fourth quarter dividend by 6%, to $0.18 per share at an annual rate, following the 6% dividend increase paid in the third quarter of 2004.

At September 30, 2004, AMS provided Gamma Knife radiosurgery services to 18 hospitals in the United States. Craig Tagawa, Chief Operating and Financial Officer, said that three additional hospitals currently are scheduled to begin Gamma Knife service through AMS over the next few quarters. “Our Baptist of East Tennessee Gamma Knife project is scheduled to open by January 2005. Northern Westchester Hospital in Mt. Kisco, New York has received its Certificate of Need approval and is anticipated to open late in the first quarter of 2005. Mercy Health Center in Oklahoma City, our 21st Gamma Knife project, is projected to begin operating in mid-2005,” he said.

Tagawa noted that total treatments in the third quarter of 2004 increased 8% compared to the third quarter of 2003. He said that treatments from Gamma Knife units in operation more than one year decreased 4% compared to last year’s unusually high volume, reflecting normal fluctuations in disease incidence and related factors. “The pace of treatments has picked up noticeably in the past couple of months,” he said.

Conference Call AMS has scheduled its conference call for 4:00 pm ET today. To participate in the live call, dial (800) 446-1671 at least 5 minutes prior to the scheduled start time. A simultaneous WebCast of the call may be accessed through the Company’s website, www.ashs.com, or through CCBN, www.companyboardroom.com. A replay will be available for 30 days at these same internet addresses, or by calling (888) 843-8996, pass code 10196953. The replay will also be available at www.ashs.com and www.companyboardroom.com.

About AMS American Shared Hospital Services is building a profitable medical services company in an underserved niche — turnkey technology solutions for advanced radiosurgical procedures. The Company’s core business is supplying hospitals with the Gamma Knife — a non-invasive treatment for malignant and benign

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brain tumors, vascular malformations and trigeminal neuralgia (facial pain). The Gamma Knife, the gold standard in radiosurgery, reduces surgical risk and patient discomfort, resulting in a shorter hospital stay and lower risk of complications. In most cases, Gamma Knife patients resume their normal activities within a few days of treatment, compared to weeks or months for patients who undergo conventional surgery. More than 250,000 patients worldwide have already received this treatment. American Shared Hospital Services is the world leader in providing Gamma Knife radiosurgery services.

Safe Harbor Statement This press release may be deemed to contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American Shared Hospital Services, which involve risks and uncertainties including, but not limited to, the risks of the Gamma Knife business and the risks of developing its IMRT and The Operating Room for the 21st Century® programs. Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, its Quarterly Report on Form 10-Q for the periods ended March 31, 2004 and June 30, 2004 and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 17, 2004.

Contacts:	American Shared Hospital Services
	Ernest A. Bates, M.D., (415) 788-5300
	Chairman and Chief Executive Officer
	e.bates@ashs.com
	Berkman Associaties
	Neil Berkman, (310) 277-5162
	President
	info@berkmanassociates.com

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AMERICAN SHARED HOSPITAL SERVICES

PRESS RELEASE
Third Quarter 2004 Financial Results October 26, 2004
Page 3

Selected Financial Data
(unaudited)

				Summary of Operations Data
	Three months ended Sept. 30,						Nine months ended Sept. 30,
	2004			2003			2004			2003
Revenue	$	4,136,000		$	4,011,000		$	12,479,000		$	11,785,000
Cost of operations		1,906,000			1,895,000			5,936,000			5,313,000
Gross margin		2,230,000			2,116,000			6,543,000			6,472,000
Selling & administrative		817,000			702,000			2,345,000			2,367,000
Interest expense		553,000			656,000			1,727,000			1,908,000
Operating income		860,000			758,000			2,471,000			2,197,000
Interest & other income		21,000			27,000			64,000			99,000
Minority interest		(267,000	)		(224,000	)		(764,000	)		(699,000	)
Income before income taxes		614,000			561,000			1,771,000			1,597,000
Income tax (benefit) expense		(226,000	)		192,000			172,000			558,000
Net income	$	840,000		$	369,000		$	1,599,000		$	1,039,000
Earnings per common share:
Basic	$	0.18		$	0.10		$	0.38		$	0.27
Assuming dilution	$	0.16		$	0.07		$	0.31		$	0.20
Basic shares		4,755,000			3,871,000			4,214,000			3,827,000
Diluted shares		5,119,000			5,081,000			5,097,000			5,072,000

Balance Sheet Data

	9/30/2004		9/30/2003
Cash	$	9,512,000	$	10,882,000
Restricted cash	$	50,000	$	50,000
Current assets	$	13,106,000	$	14,280,000
Total assets	$	46,158,000	$	47,042,000
Current liabilities	$	8,154,000	$	7,560,000
Shareholders’ equity	$	17,326,000	$	15,143,000